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Lowe’s, Still In Fix-Up Project, Lifted By Housing

Strong housing gains gave an extra lift to Lowe’s Cos. this quarter, making it easier for the home improvement retailer to make the case that its turnaround plans are taking hold.

“It makes it much easier,” chief executive Robert Niblock said in an interview. “Implementing substantial change in a large organization is difficult but an improving housing market helps it resonate easier and more quickly.”

Second-quarter profit at Lowe’s jumped 26% and sales at stores open at least a year rose by 9.6%, marking the company’s strongest two-year performance since 2006.

The world’s second-largest fix-it chain, which has 1,754 stores and reported $50.5 billion in sales last fiscal year, is in the midst of a revival effort to counter its larger rival, Atlanta-based Home Depot Inc., which has gained market share at its expense for the past four years.

Lowe’s has been trying to make it easier for customers to find what they are looking for by trimming the number of choices of products, such as drills and barbecue grills, while increasing inventory so popular items are in stock. It’s rejiggering its supply chain and is trying to shift its workforce to spend more time with customers on the sales floor.

Still, Mr. Niblock attributed more than half of Lowe’s sales growth to the rise in housing prices, renewed consumer confidence and delayed consumer spending from a colder first half of the year.

Similar gains at Home Depot, which said profits increased by 17% and same-store-sales rose by 10.7%, bolstered analysts’ skepticism that Lowe’s gains could be attributed to an improving business, rather than a healthier housing market.

“Lowe’s should get some credit for today’s strong results,” said Jefferies & Co. analyst Dan Binder. “But if action in Home Depot yesterday is any example, maybe not much.”

Comments (1 of 1)

that's because of the non service veterans who honorly served their country helped out a great deal for Lowes because of Lowe’s honored the non serviced vets by giving them 10% off on their purchases where Home Depot dose not respect and honor those who served their country and dose not follow what Lowes honorable policies are towards the non service vets who faithfully served their country to the fullest